Introduction
If you think you only need an accountant during tax time, you may
want to think again. Good business accounting is not just about
balance sheets and tax returns. With the help of a competent
accountant, you can track your business's finances and make
sure it's running at the optimum level.

And to take it even one step further, your accountant is a great
resource to tap into for business valuation and business consulting
purposes. Whether you need to get your financial statements in
order or an audit to present to potential investors, exploring the
spectrum of services your accountant offers could help you turn
that once-a-year, tax-time meeting into an invaluable year-round
resource.

Luckily, there are quite a few effective options available that
won't take a nasty toll on your budget.

What is
accounting?
Accounting refers to the practice of tracking a business's
income and expenses and using those figures to evaluate its
financial status.

One of the most basic accounting services is bookkeeping, which
involves keeping a record of all financial transactions and then
preparing financial statements such as balance sheets and income
statements. Accountants can then take this information and roll it
into tax services, another basic accounting service.

But the business of accountants goes beyond just basic
number-crunching. Accountants include a number of other services in
their repertoire: auditing services, tax planning, business
consulting, business valuation, and financial planning, just to
name a few.

Bookkeeping
In bookkeeping, an accountant keeps a comprehensive record of how
much your business owes creditors and how much is owed to you. The
records of these transactions also indicate how much you have
invested in equipment and inventory.

Typically, accountants handling the books take care of accounts
receivable and accounts payable, put together financial statements
(such as balance sheets, income statements, and cash flow
statements) and take care of bank reconciliation.

The cost climbs as the volume of work expands. The more
transactions and the more statements you expect your accountant to
prepare, not to mention how often you want these financial
statements whether they be monthly or yearly, the more you'll
pay.

Tax services
Taxes are one of those areas that can easily be underestimated.
When tax time rolls around, a good accountant, in preparing your
return, can help ensure that the necessary steps have been taken to
minimize filing errors that can trigger an audit.

But if you're just in and out of your accountant's
office when it comes time to do your taxes, you could be missing
out on a major money-saver.

A knowledgeable tax accountant can suggest ways your business
can save thousands of dollars through tax planning and tax-saving
strategies. In tackling these issues, you and your accountant can
also look for ways to add value to your business.

Of course, the more complex the tax planning and the more
ongoing the tax services are, the higher your bill. But in the long
term, the tax dollars saved makes this extra expense worth every
penny.

Audits
Audits are mandatory for public companies; private companies
don't have to conduct audits unless a bank or an outside
investor requests one.

Accountants might handle an audit for a private company, for
example, that is looking for funding from investors who want to
have an independent opinion on the fairness of the company's
books, financial statements, and financial position.

Most audits can be divided into two phases: the accounting work
done to prepare for the audit, and the audit itself.

Make sure it's clear in the beginning what you're paying
for. While some accountants will give you cost estimates for these
two aspects of the audit, others will simply give you one estimate
for the audit and add-on costs at the end for the preparation.

Here are a few things to consider when trying to hold down the
cost of an audit, one of accountants' more expensive services
because of the detail and time that is usually involved:

Do some of it yourself. Have your in-house staff
prepare the necessary documents for the audit. This cuts down the
preparation time that your accountant would have otherwise spent
just getting things in order for the audit - time that you would
have been billed for.

Hand over clean books. The cleaner and clearer the
books, the less time it takes for your accountant to get through
all the paperwork.

Other
services
There are also a few other more specialized services accountants
can provide.

Reviews
Reviews are less detailed than audits. For a review, your
accountant will determine whether the financial statements fairly
represent the company's financial status.

Reviews, which are smaller in scope than an audit and therefore
less expensive, are usually done on a quarterly basis for public
companies since it is not required that public companies have
quarterly figures audited.

Unlike the more critical evaluation of an audit, however, that
actually tests the details documented, reviews simply touch upon
the reasonability of the statements and offer a limited
opinion.

Compilations
Compilations are even less detailed than reviews, and they
don't involve any opinion on the part of the accountant. For a
compilation, your accountant will simply take the financial general
ledger and create financial statements from it.

Business
consulting
Business consulting is one of the more specialized services, so the
rate or fee may reflect that.

If you're exploring a specific aspect of your business, for
example looking to cut costs and improve your profit and loss
statement, it's a good idea to look for an accountant who not
only has experience in business consulting but one who is also
familiar with your industry and market.

Business
valuation
Business valuation is also a specialized kind of service, so as
with consulting, you can expect the costs to go up.

Business owners might want a business valuation if they are
looking to sell the company or if they want to do some estate
planning. Business valuations are also useful when applying for a
loan.

In any case, you'll want to find an accountant who has
experience dealing with companies in your industry and market. An
accountant with this kind of background will have more insight into
your particular situation than one who is just stepping in with no
frame of reference to draw from.

Financial
planning
Financial planning has really taken off in the past five to 10
years for accountants. This service turns the focus from the
business to the business owner. The need for financial planning
becomes more pressing when a business owner starts to look at
long-term care insurance, wills and trusts, and estate
planning.

For instance, if one wants to pass the business on to his or her
family, an accountant could suggest ways of doing so without having
the family hit by a huge tax burden.

Pricing
While the costs can run the gamut depending on your company's
specific needs, accountants usually charge a flat rate per month
for basic bookkeeping services.

Rates can vary depending on your geographic area, the size of
the firm, and the experience and seniority of your accountant. But
even for the most basic of bookkeeping services, you can expect to
pay $1,400 to $1,500 per month.

Sometimes in the beginning, accountants will charge an hourly
rate until they get a feel for your business and how much time is
involved in the work you want done. A few months into it, you can
usually negotiate a flat fee for your long-term needs.

For more in-depth and complex services, such as financial
planning, accountants typically charge an hourly rate.

Focus groups are helpful because the participants can be probed
for the reasoning behind their opinions, and conversations can be
generated around a particular topic - giving you what's known
as "rich data" as opposed to, for example, the finite
answers you get from survey questions.

Cutting costs
While costs will vary depending on your individual business and the
accountant you've hired, here are a few tips that can help you
keep your costs down.

Keep records as automated as possible. This makes
it easier for the accountant to access the information.

Keep records as clean and clear as possible. If it
is difficult for the accountant to decipher ledgers, it just means
more time for them and more money out of your pocket.

Do your homework. Do what you can as you can to get
all of the simple paperwork out of the way on your own, especially
in the case of an audit, which can be costly.

Hire temps. If you need someone to only take care
of running the books, you may want to consider hiring temporary
help. This is cheaper than going to a CPA for basic
bookkeeping.